VFI chief says closures increasing as costs leaving rural pubs in crisis

Over 300 publicans attended the Vintners’ Federation of Ireland AGM in Mount Wolseley, Carlow, this week, voicing their concerns for the trade. Picture: Conor McCabe

The chief executive of the Vintners’ Federation of Ireland (VFI) Pat Crotty has called for targeted supports for rural pubs which are facing an "existential threat" with the numbers of pub closures now getting even faster.

Mr Crotty told the organisation's AGM at Mount Wolesley in Carlow that the situtation facing pubs in rural Ireland has hit a crisis point, with the rate of closure every year now averaging 128. More than 2,500 pubs have closed since 2005.

Over 300 members attended the AGM in Carlow.

“A pub is more than just a business. It performs a vitally important public function as a hub of social and cultural life, connection and community identity. When a rural pub closes, a community loses more than a business – it loses a social anchor," said Mr Crotty.

VFI says that electricity costs have increased by 70% in the past five years and wages by 40%. The VFI chief executive said the reduction in the VAT rate to 9% for food services was welcome but that the measure does not benefit the majority of rural pubs, with 64% not serving hot food.

“There is simply no capacity left to absorb further cost increases. Ireland’s pubs, particularly smaller rural pubs that do not serve food, continue to face significant cost-of-business challenges which pose an existential threat to their survival,” Mr Crotty said.

“Closures are intensifying and this points to an increasing rate of market failure in the sector.” 

VFI has called for an on-trade sustainability scheme through a tax credit for pubs, linked to the supply cost of draught products. VFI proposes such a scheme would be capped at €20,000 per premises and is designed to support smaller pubs in particular.

“We have seen the Government move to support industries such as film and TV, gaming, and reality TV through targeted tax credits. Under current arrangements, the TV and film industry can avail of tax relief when filming in an Irish pub, while publicans themselves receive no equivalent support”, Mr Crotty noted.

A newly released VFI member survey found that trading sentiment among publicans has continued to deteriorate,  with 41% of publicans reporting that trading conditions are now worse than 12 months ago.

Almost 42% of respondents expressed a lack of confidence in the future of their business.

Around 65% stating that rising costs are having an unsustainable impact on operations.

"Irish pubs are recognised around the world as a defining part of our cultural identity. We must act now to protect them, and the people behind them," said Mr Crotty.